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"Obama Budget Proposal Likely to Decrease Charitable Contribution by Billions"

Original post made by Mark on Apr 18, 2010

Quick... think about one of your favorite charities. For our family, it is Homeward Bound Goldens ... an amazing Golden Retriever Rescue organization near Sacramento. >>> (Web Link)

I can't help but think how the Obama budget will impact this wonderful organization and thousands more.

Recently, I came across an article entitled "Obama Budget Proposal Likely to Decrease Charitable Contribution by Billions" >>> Web Link

Makes sense that many many charities will be impacted by Obama. The Obama Admin wants to make the decisions on how and where it is best to spend what normally we would give to charities...since they make "infinitely better decisions" that ordinary citizens.




Comments (19)

Posted by Kathleen, a resident of Amador Valley High School
on Apr 19, 2010 at 7:39 am

And it could, just as easily, have little impact on private charitable giving. Donations to charity are directly tied to employment. Many firms and even public employees donate through pre-tax payroll deductions to United Way, Red Cross, etc. No job, no donations.

BTW, your link to the article is not working, and good luck with further advertising for your pet charity (pun intended).


Posted by Mark, a resident of Another Pleasanton neighborhood
on Apr 19, 2010 at 8:36 am

Kathleen:
Thank you for informing me about the link. Here is the link to the article "Obama Budget Proposal Likely to Decrease Charitable Contribution by Billions"...>>>

Web Link

Obama wants to make the decisions on which organizations are "worthy" of contributions...not leaving this up to you and me.


Posted by Mark, a resident of Another Pleasanton neighborhood
on Apr 19, 2010 at 8:39 am

(I don't know what the technical glitch is in the PW site, because I pasted the link twice and it apparently did not accept it. Anyway, here is the full text of the article below. )

Shocker: Obama Budget Proposal Likely to Decrease Charitable Contribution by Billions
By Anthony Kang (Bio | Archive)

Fri, 04/16/2010 - 17:26 ET
Another devastating intended/unintended consequence of the Obama administration's major government expansion: charity organizations (already in deep struggle to weather current economic conditions) will likely experience additional major decline in contributions.

On the April 16 broadcast of Fox Business Network's "Varney & Co.," Rick Dunham, CEO of fundraising consultant Dunham & Company, weighed in on the new budget proposal that would scale back charitable deductions for families making over $250,000.

"Do you think you're going to take a really big hit in terms of lower donations to charities? How big a hit?" host Stuart Varney asked.

"Well the Center on Philanthropy at Indiana University did a study last year to look at the impact of the rise in the marginal tax rate and the capping of charitable deductions at 28-percent and they believe that it'll be about almost a $4 billion hit based on 2006 dollars," Dunham said. "So we're probably looking at about a $5 billion hit."


"That's a sizable chunk of money," Varney said. "There has been some talk that the administration wants to control charitable giving, and direct where your charitable gifts should go, therefore do it through the government and not through private charities. You think there's anything to that?"

Dunham didn't reject the idea out of hand. "I think all the actions kind of lead that direction. Part of the challenge charities are facing right now is they're coming off of two years of a decline in giving to charities," Dunham stated, citing the approximate $12 billion decrease in charitable giving the last two years.

"The government has always encouraged it through the tax incentive. And I think that's been a huge part of giving in America - that the government has stood behind private philanthropy by saying 'we want you to invest in charitable institutions for the good they do to our society.' And I think that's what they're beginning to undermine."

Varney then turned to Rep. Scott Garrett (R-NJ).

"I think the administration wants to do two things. One is they want to try to control where your charitable donations go for the time being until they continue to squash that down," the congressman argued.

"And just like with health care, the auto industry, they want to control the economy even more - and so the ultimate goal, some would argue, is to say that we're not going to rely on charity anymore for future philanthropic organizations. We're going to turn those responsibilities over to who? The government and so you and I won't be making charitable donations except in the form of paying higher taxes to pay for those programs instead."

Rick Dunham could not agree more.

"I totally agree. In fact Barclays Wealth did a study - there's been four major booms and busts in charitable giving since the 1500's," Dunham said. "The boom comes with wealth generation and business innovation; the bust comes with government intervention and that's exactly what's happening right now."

Read more: Web Link


Posted by Kathleen, a resident of Amador Valley High School
on Apr 19, 2010 at 9:03 am

"There has been some talk that the administration wants to control charitable giving, and direct where your charitable gifts should go..."

"I think all the actions kind of lead that direction."

Thanks for copying the article but this sounds a whole lot like opinion, speculation and innuendo to me. Where's the beef?


Posted by Mark, a resident of Another Pleasanton neighborhood
on Apr 19, 2010 at 9:55 am

Kathleen: Note the following research...an estimated $9 billion in reduction to charities...(Ohhhh...but the Democrat party is "sooooo caring" !!!)

Web Link

Estimated Impact of Obama's Charitable-Deduction Proposals Detailed
By Suzanne Perry

Indiana University's Center on Philanthropy has posted a paper explaining how it calculated how much giving would fall under proposals by President Obama to limit charitable deductions and raise the upper tax brackets.

The center announced last week that charitable donations would have dropped almost $3.9-billion in 2006 if the two measures had been in effect that year.

President Obama has proposed capping the tax break for itemized deductions on federal taxes, including donations to charity, at 28 percent as a way to raise money to help reshape the country's health-care system. He has also proposed raising the upper tax brackets from 33 percent and 35 percent to 36 percent and 39.6 percent.

The Tax Policy Center has made a different calculation of how much giving would be affected if the two tax proposals were imposed in 2011, as suggested by the president. The center, a joint venture of the Urban Institute and Brookings Institution, projects donations would fall by $9-billion. The explanation is posted on the center's blog, TaxVox.

Web Link


Posted by Kathleen, a resident of Amador Valley High School
on Apr 19, 2010 at 10:45 am

According to FactCheck.org, only 2% of the families in the U.S. have income over $250K. This small group are the only ones effected by the above mention changes in deduction allowances. They will also start paying more income tax when the Bush-era tax breaks expire this year and rates are returned to their previous levels.

I challenge you to find a policy statement from the White House to the effect that "Obama wants to make the decisions on which organizations are "worthy" of contributions..." I would be most interested.

As for this change being made to pay for health care reform, I would suggest it is being made to pay for the drop in income taxes due to unemployment and increases in the cost of fighting two wars, both of which are legacies of the previous administration.

Mark, I think I will stick to my original assumption that less contributions are being made due to the overall state of the economy rather than a tax code change that effects only 2% of Americans.


Posted by dublinmike, a resident of Dublin
on Apr 19, 2010 at 11:39 am

dublinmike is a registered user.

I agree with Kathleen. It's opinion.

Having a Republican state: "One is they want to try to control where your charitable donations go..." is questionable right from the get-go.


Posted by Mark, a resident of Another Pleasanton neighborhood
on Apr 19, 2010 at 11:39 am

Kathleen,
"FactCheck.org" ??? !!! That's all I need to know about you. Unless you are unaware, this organization is so far to the left...it is funded by the left. The Annenberg Foundation (which unfortunately was once conservative, is one of the supreme leftist organizations in America. It also funded Obama's projects in Chicago when he was an Alinksy Community Organizer.

If you were not aware of this...please scratch the surface and learn more about your sources. Yes, I can hear you now as you prepare to criticize my more conservative source. They do not try to hide their conservative bias and ideals.

Web Link

PS...Your comment, I challenge you to find a policy statement from the White House to the effect that "Obama wants to make the decisions on which organizations are "worthy" of contributions..." I would be most interested." Don't be silly, do you think Obama will admit his real goals and objectives ... examples... of destroying America's economy and defense?

All of his (devastating) projects will be "justified" as being for the "little guy" and for "fairness" when the real objective is to increase his power, to render America dependent and much less powerful.

If you are not concerned by Obama's direction for America, I submit that you are simply not paying attention.




Posted by Kathleen, a resident of Amador Valley High School
on Apr 19, 2010 at 12:05 pm

Mark -- If you do not approve of FactCheck.org, will you believe the U.S. Census Bureau? This link is to their most current CPS which states 2.245 million households have an income over $250K, which is 1.9% of the population. Web Link

Until you have something more substantial than paranoid suspicions to back up your unfounded claims that Obama "wants to make the decisions on how and where it is best to spend what normally we would give to charities", I will pass on this particular bandwagon.


Posted by Tracy, a resident of Another Pleasanton neighborhood
on Apr 19, 2010 at 12:48 pm

Come on! I work for a non-profit that is Nationally based and we have advocacy staff that have to be clear on the consequences of each candidate and their platform, and the potential impact on the families we serve. If there were any perceived negative consequence of Obama's policies on the future of our organization's charitable contributions, they would have known it and they wouldn't have supported his candidacy.

These "psychic predictions" from radical conservative media that perpetuated such notions as death panels are ridiculous.


Posted by Mark, a resident of Another Pleasanton neighborhood
on Apr 19, 2010 at 3:35 pm

The Census Bureau? Are you NUTS? Talk about the government trying its best to take over the private lives of its citizens. Big Brother, anyone?

Listen, you can't trust any of the government departments because Obama is pulling all the strings now. Media? Yep--them too. Even the international media is in on it.

That being said, who can you trust? The GOP!

Thank god they're blocking Wall Street reform. How many more ridiculous ideas is GOP going to have to fight against?!?!


Posted by Amazing, a resident of Another Pleasanton neighborhood
on Apr 19, 2010 at 3:53 pm

Now Mark is on a rant against The Census Bureau, stating that a report that was published in 2008 for 2007 earning figures is somehow unreliable because of Obama, who didn't take office until 2009??

Mark, you asked Tracy "Are you NUTS?"

Ahem.


Posted by jimf01, a resident of another community
on Apr 19, 2010 at 4:12 pm

Kathleen - you cannot minimize any possible effect by saying that the households making over $250k are only 2% of the entire country.

As this report shows:

Web Link
in table 9 on page 11, that 2% of households (in this survey are incomes over $200k rather than $250k) account for over $142 billion of the total estimated amount of $252 billion in charitable donations in the US in 2006.

I am not coming down on one side or another on the debate, but if there is a negative effect on charitable giving from new tax regulation (I can hardly imagine there could be a POSITIVE effect on charitable giving by increasing taxes directly related to charitable giving), then it will be a HUGE effect on the total number.


Posted by Kathleen, a resident of Amador Valley High School
on Apr 19, 2010 at 5:28 pm

Jim -- I have no doubt that those who make more tend to give more, but I will return to my earlier response on this issue: "...I will stick to my original assumption that less contributions are being made due to the overall state of the economy rather than a tax code change that effects only 2% of Americans."

Donations were already down before this cap on deductions was ever discussed.

Even people in the over $250K bracket lost on their investments, lost their jobs, homes and earning power in the last couple of years. That adds up to less in charitable donations by those who were previously more able to give.

It will be years before the impact of this cap on deductions is realized, but donations have already dropped, demonstration no cause and effect, as Mark suggested.


Posted by The other Mark, a resident of Another Pleasanton neighborhood
on Apr 19, 2010 at 5:48 pm

Tracy,
I suggest that you then educate your advocacy staff about Obama's intentions (tho they should have been very predictable).

Here is a link...Web Link

White House budget cut to charitable deduction alarms philanthropists and non-profits
By Gautham Nagesh - The Daily Caller

| Published: 02/01/10 | Updated: 04/13/10 at 5:42 PM

Copies of President Barack Obama's budget are delivered to the Senate Budget Committee on Capitol Hill in Washington, Monday, Feb. 1, 2010. (AP Photo/Manuel Balce Ceneta)
The Obama administration's fiscal 2011 budget proposes cutting the tax deduction for charitable donations, alarming both philanthropists and non-profits across the country.

The White House is expecting to collect an additional $291 billion over the next decade by reducing the write-off for families earning over $250,000 despite the fact Congress roundly rejected such a measure last year. While the administration is portraying this as a populist move, experts have said the end result will be a significant blow to charities and non-profits already reeling in the midst of the recession.

"It's frankly surprising to see this proposal come back this year, it was very controversial last year," said Tom Riley, vice president for communications at the Philanthropy Roundtable. "This of all times isn't the time to take actions that would discourage charitable giving. The need for non-profits hasn't been higher for a generation."

Roberton Williams, a senior fellow at the Tax Policy Center said the rule change would make it about 10 percent more expensive for individuals affected to donate to charity. He estimated that would correspond to a $10 billion drop in donations out of the $300 billion Americans give annually.

"From the perspective of charities, they're in a tough time right anyway," Williams said. "Some charities have been seeing a drop-off in donations and charities themselves that have endowments are seeing a drop-off in return from investments. It's a double whammy."

Last year the Obama administration defended the move, claiming that the $100 million included in the Recovery Act for charities and non-profits would help cover the gap, along with the natural rise in donations following the economic recovery. Those arguments will be even tougher to make this year with the country still mired in double-digit unemployment and no second stimulus for charities in the works.

"I think that can be a naive view, that charities will be specifically helped by getting potential government dollars instead of private dollars they are getting right now," Riley said. "The idea that private money will be replaced by growth that may or may not happen, government programs that may or may not happen, seems at best a risky bet."

The cut is targeted to include families that are the largest donors to charitable organizations. Riley pointed out that many members of Congress united with the philanthropic community last year to defeat the measure and he expects a similar outcry this year. Among the most vocal critics on the Hill last year was Sen. John Thune, South Dakota Republican. If the proposal fails, the Obama administration will be forced to look for other savings to avoid tacking another $300 billion onto the already multi-trillion dollar medium-term deficits.

"I think people in charitable world are going to be very alarmed to see this come back," Riley said. "We thought this was a battle of ideas that had been won."

Read more: Web Link


Posted by Kathleen, a resident of Amador Valley High School
on Apr 19, 2010 at 6:04 pm

I got bogged down in the debate regarding the fortunate 2% among us, but my primary objection to Mark's original comments were regarding the assertion that the government was poised to dictate where our private donations can go: "Obama wants to make the decisions on which organizations are "worthy" of contributions...not leaving this up to you and me." I see that as nonsense.


Posted by Mark, a resident of Another Pleasanton neighborhood
on Apr 19, 2010 at 6:21 pm

Kathleen...duhhhhh? hellooooo? anybody home?

If we the people have less to contribute to charity, thanks to massively increased taxes, Obama will then be left to support select charities. All cannot and will not be supported in at the same pre-Obama levels. Some will receive more funding, some less, some probably none.

Therefore he and his fellow czar-ist regime will have to decide how to spend the additional tax revenue. He will only choose charities which benefit democrats and will keep them in power. That is the Alinsky way.


Posted by Kathleen, a resident of Amador Valley High School
on Apr 19, 2010 at 7:32 pm

The proposal would cap the subsidy at 28 cents on the dollar for those with incomes over $250,000 (only 2% of Americans) which is the same rate at which those expenses could be deducted during the Reagan years, when the top tax rates were lower. As a result, the tax benefit incentive to donate would be the same as under President Reagan.

A substantial portion of charitable giving derives from foundations, estates, and corporations and from individuals who do not itemize their contributions on their tax returns. Itemized contributions represent only 62 percent of total charitable giving, according to Giving USA Foundation, Giving USA 2008: The Annual Report on Philanthropy for the Year 2007. Thus, only 38 percent of Americans seek deductions to start with.

Your suggestion that the president would hand-select "charities which benefit democrats" to receive more support than others is, again, nonsense and has no basis in fact or logic.

Again, I have no doubt donations will continue to slow, but I believe that is primarily from a weak economy and ongoing foreign wars.


Posted by Kathleen, a resident of Amador Valley High School
on Apr 19, 2010 at 7:34 pm

Correction: Thus, 38 percent of Americans do not seek deductions to start with.


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